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A far-reaching decision by the Ministry of Defence (MoD) will come as ajolt for domestic shipbuilders in the private sector seeking toparticipate in India’s submarine programme. Top sources in the ministryhave told Business Standard that its apex defence acquisition councilhas decided to exclude Indian private shipyards from the constructionof six submarines for the Indian Navy under Project 75I. Instead, thefirst two submarines will be built at a foreign shipyard.

Project 75I initially envisaged all sixsubmarines to be built in India. The MoD-owned Mazagon Dock Ltd,Mumbai, was to build three; Hindustan Shipyard Ltd — recently acquiredby the MoD from the Ministry of Shipping — would build one; whileIndian private sector shipyards L&T and Pipavav would compete tobuild two. But the navy’s insistence on having the first two submarinesbuilt abroad has torpedoed the private sector shipbuilders out of thepicture.

The navy’s decision, explained a senior admiral on condition ofanonymity, stems from delays that have been endemic to indigenoussubmarine construction. India bought four HDW submarines in the 1980s.HDW’s shipyard in Germany built two of them in just 56 months each. Incontrast, Mazagon Dock took 98 months and 116 months to build theremaining two. Mazagon Dock is also running 30 months late indelivering the first of six Scorpene submarines that it was contractedto build under Project 75.“At least two submarines will come in quickly by building themabroad,” said the admiral. “We are desperately short of submarines.” Aperformance audit of the navy by the Comptroller and Auditor Generalhas documented that just seven or eight of India’s 15 submarines areoperational at any given time against a projected requirement of atleast 24.Yet, curiously, despite the dismal track record of Mazagon Dock, thedefence acquisition council has decided to hand it a prime role inProject 75I as well. While the cost of Project 75I is still not known,it will substantially exceed the Rs 23,562 crores that India paidFrench companies Armaris and DCNS for Project 75, since building twosubmarines abroad will inflate the cost.Furthermore, that decision will require fresh sanction from theCabinet Committee on Security — typically involving a 12-24-month delay— since the current sanction mandates that all the submarines must bebuilt in India.Only after that will a tender be issued to identify a foreigntechnology partner. Among the possible bidders for the contract areRussia’s Amur Shipbuilding Plant, Germany’s HDW, Spain’s Navantia,Italy’s Fincantieri, and France’s DCNS.In 1999, the Cabinet Committee on Security approved a 30-year planfor 24 conventional submarines to be constructed in India. Thissanctioned two simultaneous construction lines: six using westerntechnology; and six based on Russian knowhow. After that, 12indigenously-designed submarines were to be built.The navy believes that Russian submarines have greater endurance,firepower and strategic utility, while western submarines arestealthier and, therefore, harder to detect. It was reasoned thatIndian designers would adopt the best of both traditions when designingthe 12 indigenous submarines.Private companies such as L&T and Pipavav have investedthousands of crores of rupees to build world-class shipyards, and havelobbied intensely for a share of the submarine programme. Over the lastdecade, L&T has played a central role in building and outfittingthe nuclear-powered INS Arihant, and will do so for its two successorvessels.Senior L&T officials have argued that Mazagon Dock would haveits hands full with Scorpene production until at least 2019 and has nocapacity to take on another three submarines. But the MoD has presenteda detailed plan for the shipyard to set up a second submarine line.